HMG Investment Holdings Ltd v National Westminster Bank Plc

This is an application by HMG Investment Holdings ("the applicants") for the court to reopen pursuant to CPR 52.30 the refusal on 28 February 2019 of permission to appeal the order of Robin Knowles J dated 17 December 2018 dismissing their claim.

The background is as follows. The applicants have alleged that the respondent bank had made what was called the decreased risk representation in relation to the proposed "Geared Collar". During a telephone conversation on 4 April 2008, in response to concerns raised by Mr Mitchell of the appellants, who said, "my concern is, are we increasing our risk rather than decreasing it?", Mr Bescoby of the bank said, "Well I think potentially you're actually decreasing it, and I'll tell you the reason why". He went on to explain, as the judge found at paragraphs 34 to 35, 44 to 45, 56 and 66 of his judgment, that although the risk of breaching the floor was increased since the floor was now 4.15 per cent as opposed to 3.95 per cent under the existing hedging arrangements, the impact of breaching the floor was less, because the increase in rates under the Geared Collar if the floor were breached is more gradual than under the original hedging arrangements. The judge held that it was in that sense of the lesser impact of breaching the floor that Mr Bescoby said that potentially the Geared Collar was decreasing the risk. He rejected the applicant's argument that Mr Bescoby was referring to that the Geared Collar exposing the applicants to less risk overall than the original hedging instruments. The judge found at paragraph 70 that the decreased risk representation as alleged by the applicants had not been made, since what was said was not confined to the sentence relied upon by the applicants but included the explanation given and therefore whatever was represented was not false. Because the judge had concluded that the claim in misrepresentation failed, he concluded at paragraphs 59 to

The judge held that he did not need to enter into questions of loss because they did not

By an appellant's notice dated 17 January 2019, the appellant sought permission to appeal on the following grounds of appeal:

This application was supported in the usual way by the appellant's skeleton argument from Mr Richard Edwards QC and Ms Lacey. Mr Ayres QC and Ms Cleary for the bank served a respondent's statement under CPR PD 52C, paragraph 19(1) setting out their reasons for submitting that the proposed appeal was hopeless. The application came before me on paper in the usual way. I considered all the documents to which I was referred, including for the avoidance of doubt the appellant's skeleton, and, on 28 February 2019, I refused permission to appeal, giving the following as my reasons:

By an application dated 22 March 2019, the applicants seek to reopen that refusal of permission to appeal under CPR 52.30, alleging that I have failed to address any of the arguments advanced by the applicants in their grounds of appeal and skeleton. This allegation was advanced at some length in a further skeleton running to some 14 pages and has been repeated in the oral submissions made by Mr Edwards QC before the Court this morning. Before considering in more detail the arguments now advanced, it is important to note that the circumstances in which the jurisdiction to re-open a refusal of permission to appeal under CPR 52.30 can be exercised are very narrow. This Court recently confirmed in Goring-On-Thames Parish Council, R (on the application of) v

As that judgment also makes clear at paragraph 29, this is an exceptional jurisdiction.

This is emphatically not a jurisdiction which simply enables a party to reargue an application for permission to appeal that it has lost simply because it considers that the single Lord or Lady Justice has got it wrong: see Barclays Bank plc v Guy [2010]

Despite the persistence of Mr Edwards QC's submissions, I consider that his client gets nowhere near satisfying the stringent test under CPR 52.30 for a number of reasons. Firstly, as is said by the Court of Appeal in South Oxfordshire at paragraph 35, the reasons for refusing permission do not need to be lengthy, provided there that an adequate explanation is given for the refusal of permission on each ground of appeal. In short, the applicant must be able to understand why, on the appropriate test under the Rules, the intended appeal is not being permitted to proceed. It is not the function of the reasons to set out seriatim each argument in the skeleton argument like some species of Aunt Sally to be knocked down. As I pointed out during the course of argument, were that to be so, this Court would be occupied full time dealing with paper applications for permission. The Order made by the Court has to address the essential issues raised by the grounds of appeal, which my Order clearly does.

Secondly, contrary to Mr Edwards' assertions, it is quite clear from my reasons why I have concluded that the proposed grounds of appeal have no real prospect of success. Specifically, in relation to the principal ground, which seems to be the only ground still pursued, I said in paragraph 1 that I agreed with the respondent that the judge's interpretation of the 4 April 2008 conversation was correct, rejecting the applicant's argument that what was said amounted to a representation that the Geared Collar would expose the applicant to less risk than the original hedging overall. That was the applicant's case at trial, as is clear from the submissions that have been made to the Court this morning and from the skeleton argument. Rather, I concluded that the judge was right to decide that what Mr Bescoby was saying was that, whilst under the Geared Collar the risk of breaching the floor was increased, the impact of breaching the floor was less than under the original hedging instruments. I referred to paragraph 44 of the judgment, which is indeed one of the paragraphs where the judge expressly so found. In fact the judge essentially repeats that finding in a number of paragraphs of the judgment which I have already referred to earlier in this judgment and I do not propose to repeat.

Thirdly, even if Mr Edwards were right that I had failed to deal with all his arguments, having now considered them, they do not demonstrate any reason for reaching a different conclusion on refusal of permission to appeal. Both in his two skeleton arguments and in his oral submissions, Mr Edwards has focused on three points. First, he says, is the fact that Mr Mitchell was concerned about the inferences which could be drawn from the magnitude of the break costs as to the risk posed by the Geared Collar. That is no doubt right given the context, but Mr Bescoby provided the reassurance during a telephone conversation with which Mr Mitchell was satisfied. This point does not assist the applicant in contending that Mr Bescoby made a representation which the judge correctly found he did not make. Mr Edwards submits that Mr Mitchell was clearly asking about the risk of the new structure as a whole. That is not in fact what the judge has found, and it was not suggested that the judge's finding was contrary to the evidence. But whether that was right or not, the assurance that Mr Mitchell was given was that which the judge found, with which, for whatever reason, Mr Mitchell

Secondly, Mr Edwards placed particular emphasis on a submission that the finding the judge had made at paragraph 47(a) of the judgment was wrong. I should read 47(a). At 47 the judge said:

Mr Edwards submits that this finding was wrong and that Mr Mitchell and Mr Bescoby cannot have meant to refer simply to the risk of breaching the floor, because that clearly would increase. He submitted that that they must have been referring to the risk of the Geared Collar overall and that I had failed to deal with this critical point and with what he described as the radical inconsistencies in the judgment on this point. With respect, paragraph 1 of my reasons does deal with this argument, because I have accepted the judge's analysis as to what it was that Mr Mitchell and Mr Bescoby were saying about risk, and that what Mr Bescoby was saying was that, although the risk of breaching the floor was increased, the impact of the breach was less than under the existing hedging, which was correct. There was a suggestion, certainly in the written argument, that the judge himself at failed to explain his rejection of the applicant's arguments on this point. That is a false point. The judge, as he was entitled and indeed bound to do, focussed on the critical issue whether Mr Bescoby had made the general

Thirdly, Mr Edwards submits that I failed to deal with what has been described as his grammatical point about the word "it" in the sentence "Well I think potentially you're actually decreasing it, and I'll tell you the reason why". Mr Edwards submitted that "it" must be referring to the overall risk, which is how it would have appeared to Mr

It follows that even if I had accepted that I had failed to deal with the appellant's arguments, which I do not, those arguments do not establish any basis for reopening permission to appeal, let alone for concluding that the proposed appeal has any real prospect of success. This application to reopen is dismissed.